Binatone looks to invest $50 million to start local manufacturing

Hong-Kong based Binatone Communications Group plans to start manufacturing of routers and broadband connectivity equipment from India and could invest upto $50 million (Rs315 crore) in setting up a plant, a senior executive said.
“The India business for the company has been doubling every year, so we will begin manufacturing here,” Binatone chairman Dino Lalvani told ET.

“As India is approaching 10% of our global turnover of $880 million, so making in India will give us a logistical support and an option to China, where costs of labour and doing business are rising,” he added.

Customer premises equipment or CPE’s include wireless and wired routers and modems that are required by telecom companies or internet service providers for setting up indoor broadband connections.
Binatone is one of the major suppliers of CPE’s and routers to large telecom clients including Bharti Airtel, Tata, MTS and MTNL. At present, it manufactures CPE’s from its unit in China.

The India manufacturing plant, for which the company is looking at three to four locations including Greater Noida and Rajasthan, is expected to be finalised within the next few months. It will initially take some of the load from China. Once the plant is scaled up, the company will add more products and also begin exporting from India, which is said was closer to its primary market of Europe.

An investment of $40-50 million has been earmarked for setting up the plant and Binatone may also consider partnering with companies that have existing manufacturing set ups, which can be scaled up.

“We thought it was important to embrace the new government and endorse 'Make in India',” Lalvani added. “We want to have a strategic alternative to China. The idea is to take the company public next year.”

With the Union Budget around the corner, the company expects beneficial announcements and tax incentives that may help it invest in India to speed up the process. At the same time, with adoption of 4G technology rising and telcos investing in setting up LTE networks, Binatone plans to begin selling 4G wireless routers and modems, and in the long term, manufacture them out of the local facility.